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MTrading Team • 2023-02-02

EURUSD buyers need ECB’s support to keep controls

EURUSD buyers need ECB’s support to keep controls

EURUSD remains above the top line of a three-month-long bullish after the Fed-inspired volatility. The nearly overbought RSI (14), however, suggests that the bulls are running out of steam of late. That said, the 100.0% Fibonacci Expansion (FE) of the pair’s moves between November 11, 2022, and January 06, 2023, close to 1.1045, appears immediate hurdle for the bulls to cross to keep the reins. Following that, a run-up toward the late March 2022 high near 1.1185 can’t be ruled out. It should be noted that the 1.1100 round figure may offer an intermediate halt during the likely run-up.

It should be noted, however, that the quote’s pullback moves remain elusive unless EURUSD remains beyond the stated channel’s top-line, close to 1.0970. Following that, 78.6% and 61.8% FE levels, respectively near 1.0930 and 1.0830 will precede the 21-EMA surrounding 1.0800 to restrict the short-term downside of the pair. Also acting as nearby key support is an upward-sloping trend line from early November 2022, around 1.0780 at the latest. In a case where the pair breaks the stated trend line support, its drop to the aforementioned bullish channel’s lower line and then to January’s low, respectively near 1.0610 and 1.0480, becomes imminent. Though, the bears are less likely to have a smooth road unless breaking the 1.0480 level.

To conclude, the EURUSD stays firmer ahead of the European Central Bank (ECB) announcements but the upside seems losing momentum and hence a pullback could be witnessed if the ECB disappoints Euro bulls. Even so, the trend reversal is far from sight.

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